How It Works

Goodbye to Guesswork

Conventional financial planning software and “free” online tools use the Replacement Rate method based on outdated, generic “Rules of Thumb.” This simplistic method “guesstimates” targets for spending and saving.

These “targets” are the basis for your whole financial plan. If they are wrong—too high or too low—the mistakes compound over time and you’re in trouble.

We don’t believe in guesswork. We have a smarter approach.

The Economics Approach: Consumption Smoothing

In the early 1950s, Nobel Prize-winning economist Franco Modigliani and his colleague Richard Brumberg developed a groundbreaking theory called the Life-Cycle Hypothesis of saving and consumption.

This common-sense theory, based on research and observation, basically says that people want their living standard to remain the same over the course of their lives. No one wants to splurge today and starve later in retirement –– or do the opposite. Economists call this behavior “Consumption Smoothing” because households want their consumption (spending) to remain the same over time.

In fact, the goal of most households is to find the highest level of spending they can sustain for life.

Simple concept, but calculating that spending level and a plan to sustain it is extremely complicated.

The Economics Approach In Action

It’s virtually impossible to find your household’s highest sustainable spending level. Income and expenses change every year and no financial decision stands alone: income affects taxes, taxes affect spending, Social Security benefits and retirement account withdrawals affect income, which affects taxes, and on and on.

MaxiFi software makes it possible. It can correctly calculate the highest spending level your household’s income and assets can support and provide a plan to sustain and protect it for life.

MaxiFi software uses iterative dynamic programming methods developed by our founder and President Laurence Kotlikoff. These methods are similar to those used in bioinformatics and aerospace engineering––actual rocket science. It's why MaxiFi software is the only software powerful and accurate enough to put the Economics Approach into action.

Your Plan for a Lifetime

While built on solid economic theory and highly sophisticated programming, MaxiFi software is easy to use and puts you in the driver’s seat.

MaxiFi's optimization engine can raise your household’s spending level by finding the best Social Security filing strategy to get the highest benefits, determining when to withdraw from your retirement accounts to lower your taxes, and more.

Whenever your financial situation changes or you’re facing a decision that could affect your finances, simply return to MaxiFi software, adjust your inputs and assumptions, and see how your plan is impacted. MaxiFi software is valuable at every stage of life to help keep your personal financial plan on track.

Disclaimer: MaxiFi Planner and all other products provided by Economic Security Planning, Inc. (referred to hereafter as "we" or "our") are educational calculators designed to give you some input in mapping out your financial future, but should not be acted upon as a complete financial plan. MaxiFi Planner and the creators of MaxiFi Planner and any derivative products are not certified, registered, authorized, or any other type of financial planners. MaxiFi Planner and its derivative products are simply tools for helping you think through your economic futures. Any suggestions should be viewed as informative inputs into your own decision-making with respect to saving and the purchase of life insurance. MaxiFi Planner and its derivative products provide neither economic, financial nor tax advice, which can only be delivered to you by authorized professionals. The Social Security benefit estimates produced by MaxiFi Planner are just that -- estimates. Only the Social Security Administration can tell you precisely the benefits to which you will be eligible or are eligible and the amounts you will receive. The estimates provided here may differ from the correct amounts due to mistakes in our computer code of which we are unaware or because of legislated changes in Social Security provisions of which we are unaware or because of delays in our updating our computer code for changes in Social Security provisions. This material is not intended to provide legal, tax or investment advice, or to avoid penalties that may be imposed under U.S. Federal tax laws, nor is it intended as a complete discussion of the tax and legal issues surrounding retirement investing. You should contact your tax advisor to learn more about the rules that may affect individual situations.